Sunday, December 30, 2012

Israel's solar power industry French, fried

I recently read that France's national electric company is setting up a field of solar panels (which were also made in France) in the Negev.

While I'm pleased to read about the new initiative -why is France setting up a new solar energy field in Israel?

Israel is no slouch when it comes to photovoltaics - we are the largest user of solar power per capita - with over 85% of all homes using a dude shemesh, or solar water heater. The wide-spread adaptation of this technology can be traced back to the 1950s, when a severe energy crises drove the government to eventually mandate the solar water heater as a way to reduce the country's dependence on imported sources of energy (oil, coal, gas). Heating water can consume up to 40% of a home's total energy use, so this means significant savings for Israelis.

Another example of a country that has seen great strides in the utilization of this technology through government intervention is Germany. It is the world's leading producer of energy from solar power - a country much further north and with much greater cloud cover than Israel.

On average, Israel consumes about 12,000 megawatts  (MW) of electricity per year. Virginia, which has slightly more people than here, consumes 110 million MW of electricity. In comparison, Israel's energy demands seem rather paltry.

So, we've established that sunny Israel has the natural capacity to generate large amounts of energy from solar panels, the ability for the government to institute policies to encourage (or force) people to buy the technology, and in comparison to other similar populations, the energy consumed seems that it could reasonably be met with renewable energy.  What is the hold up?

Some blame the Ministry of Finance, which is reluctant to pay the subsidies that encourage homeowners to install solar panels. What about a commercial power plant? In this case, there is the issue of red tape - according to Haaretz, 24 government offices that must grant approval for a new power plant to function. How bad is the buracracy in Israel? I recently visited a local wine producer, who told me that they have been waiting 10 years for government permits to come through that allow them to function legally. Unfortunately, a project as high profile as a major power plant doesn't have the luxury of building first and applying for permits later. In addition, another financial incentive started by the government in 2008 that would pay developers of new photovoltaic energy above market rates for the electricity they generate hasn't gotten off the ground. The government is constantly changing the price they are willing to pay, in order to not feel like it's paying too much. In the meantime, it is hard to encourage investors to give money to a program that doesn't have any reliability.

Fortunately, there is hope for the industry in Israel. The pioneer Arava Power Company, which launched the country's first commercial solar power field in June of 2011. Built with a seemingly paltry capacity of 4.95 MW on Kibbutz Ketura, the success of this field inspired international electricity giant Siemens to invest in the company. Together, they are now planning a new field with the capacity of 58 MW.

It's a start. One can hope that Arava's efforts will help to reduce government inertia and pave the way for other companies to begin opening their own fields and for investors to feel confidant about sending their money to Israel.

Then we can read about Israeli companies opening solar fields in France!

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